Central excise duty attaches on manufacture, so pre-existing finished goods remained liable when the special levy was introduced.

Central excise duty is attracted on manufacture, and the convenience of collecting duty at the factory gate on removal does not change the point of levy. Goods fully manufactured before the introduction of the special excise duty were therefore not spared merely because they remained in the factory when the new levy came into force. Applying the earlier decision on the same issue, liability to special excise duty arose on manufacture, not on removal from the factory, and the challenge failed.

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Issues: Whether goods already fully manufactured before the date from which special excise duty was imposed were liable to special excise duty under Rule 9A of the Central Excise Rules, 1944.

Analysis: The controlling principle was that central excise duty is attracted at the point of manufacture. The statutory convenience of collection at the factory gate on removal does not shift the incidence of levy from manufacture to removal. In light of the earlier decision on the same question, the goods which had already been manufactured were not exempt from the duty merely because they remained in the factory when the new levy was introduced.

Conclusion: The liability to special excise duty arose on manufacture and not on removal from the factory, so the challenge failed.

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